Taking 103K to 1.2million by Year End 2008
- Thread starter neke
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Quote from Sarvise:
Good to see you're up (I would say that 7% is way better thank just "ok", but I know you're a perfectionist)
Yes, 7% would be a good week under normal circumstances (if that could occur every week). However, knowing the bad weeks will come, where I would be under water, and may need several weeks to come out, the good weeks had better be very good!
Weekly Update for week 23 ended 06/20/2008
Awful week, down 21K (15.6%).
One giant step backward. Blame it on Potash (POT) and insane exposure decision.
As you can see from the bottom three trades, its all POT for a total loss of 31K. Started on the 17th, when I decided to buy puts to the tune of 32K. Why I exposed that amount on an out-of-money option that was three days from expiration is beyond me. All it needed was for the stock to move 2% against me (from 234 to 238), and I was 12K under.
Then came black Thursday for me, and I couldn't resist the pull towards self-destruction in POT: This time it was a CALL. The stock was opening 241, up more than $3 after some analyst upward revision. Decided this is now the time to play momentum (after the prior days' runs!). Bought June 240 CALLS worth 26K. As the stock came down, added with June 230 CALLS worth 19K (a veiled attempt to hide the overexposure). Watched as the value for both declined. By the time I pulled the exit button, I had lost a total of more than 19K. It was a generous gift to the market.
Will spend the next few days automating restriction for my option trades, and defining some rules for imposing limits based on time to expiration.
When will this cycle of soberness and madness end?
Awful week, down 21K (15.6%).
One giant step backward. Blame it on Potash (POT) and insane exposure decision.
As you can see from the bottom three trades, its all POT for a total loss of 31K. Started on the 17th, when I decided to buy puts to the tune of 32K. Why I exposed that amount on an out-of-money option that was three days from expiration is beyond me. All it needed was for the stock to move 2% against me (from 234 to 238), and I was 12K under.
Then came black Thursday for me, and I couldn't resist the pull towards self-destruction in POT: This time it was a CALL. The stock was opening 241, up more than $3 after some analyst upward revision. Decided this is now the time to play momentum (after the prior days' runs!). Bought June 240 CALLS worth 26K. As the stock came down, added with June 230 CALLS worth 19K (a veiled attempt to hide the overexposure). Watched as the value for both declined. By the time I pulled the exit button, I had lost a total of more than 19K. It was a generous gift to the market.
Will spend the next few days automating restriction for my option trades, and defining some rules for imposing limits based on time to expiration.
When will this cycle of soberness and madness end?
Code:
Opening Balance: 134,272
Net gain for the week -21,134
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Net Balance: 113,138
Number of Trades 23
Number of Profitable Trades 12
Since Inception of Thread 01/13/2008 - 06/20/2008
Opening Balance: 102,615
Net gain (Less Margin Interest) 15,523
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Balance Before Withdrawal: 118,134 (Up 15.1%)
Cash Withdrawal -5,000
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Net Balance 113,138
Number of Trades 528
Number of Profitable Trades 297
Expected Balance at this time to be on track for Year-End Target :
318,094
Status: Behind Target (Based on adjusted balance before withdrawals)
Top/Bottom Discretionary Trades for the week
TICKER ENTRY DATE/TIME EXIT DATE/TIME QTY PURCHASE AMT SOLD AMT GAIN/LOSS TYPE
RULRI 2008-06-17-09-48-47 2008-06-17-10-23-53 5000 14400 20000 5505 RIMM PUT
------------------------------------------------------------------------
PJNFF 2008-06-19-09-48-24 2008-06-19-13-48-25 3000 26070 19800 -6335 POT JUNE 230 CALL
PJNRH 2008-06-17-09-37-02 2008-06-17-15-13-20 4000 32000 20000 -12080 PUT JUNE 230 PUT
PJNFH 2008-06-19-09-32-03 2008-06-19-13-48-25 5000 19500 6500 -13105 POT JUNE 240 CALLI saw a show on science channel about how people deal with various stituations, blah blah. In one part of the show they had a guy offer people $50 outright. THey could just walk away with that money, or they could bet it and have the chance of making another $50 for total of $100. In a second situation, the guy would offer people $100 (literally count out the money and put it in their hand). But once he counted out the whole $100 he would take back $50, and tell the person that in order to get this $50, they need to bet what they have to have a chance to "get the other $50 back." In the first case, the majority of people took the money without betting it. In the second case, the majority was willing to bet to "get back" the $50 they "lost." Both cases are the same (person has $50 and can walk away), except in the second one the person "thinks" he has a loss and wants to get the other $50 back.
I just thought it was a nice example of how we are willing to lose in order to avoid a loss. Need to be in total control at all times.
I just thought it was a nice example of how we are willing to lose in order to avoid a loss. Need to be in total control at all times.
Appreciate your honesty in your thread.
The answer to your first question is........... It's called trying to hit a 3 run home run when the bases are empty. You have to put yourself in the right position to take a big swing. Swinging at bad pitches is a good way to strike out.
The answer to your second question is ......... When you forget about your year end target and look for good trading opportunities and trade well. You're more then capable of doing this so stop gambling.
Do you still hope to make your 1.2mil goal by the end of the year? If so, that could be a cause of your trouble. Setting absolute dollar amounts can cause discretionary traders to force trades through even if the opportunity is not there.
I stopped setting fixed goals a long time ago. As long as I trade well and avoid big losses, the money will take care of itself.
I stopped setting fixed goals a long time ago. As long as I trade well and avoid big losses, the money will take care of itself.
Hey, Neke, don't be too hard on yourself, you know that won't happen again! Build your account back up with smaller positions. You will prevail! Your account is in the green!
After some VERY expensive lessons this past month, I learned to immediately place a 20% stop on front month options and if stopped out, just move on, don't get back in no matter how tempting. I came sooo close to buying POT calls when they pulled back Thursday, but saw them trading way above their 20-day SMA. Every time they push that far, they correct for a few days. If you check the charts on these momentum stocks, the 20 SMA seems to act like a magnet both directions.
After some VERY expensive lessons this past month, I learned to immediately place a 20% stop on front month options and if stopped out, just move on, don't get back in no matter how tempting. I came sooo close to buying POT calls when they pulled back Thursday, but saw them trading way above their 20-day SMA. Every time they push that far, they correct for a few days. If you check the charts on these momentum stocks, the 20 SMA seems to act like a magnet both directions.
Neke if you are anything like me you will probably not listen to a word I have to say esp since it is coming from someone on this site 
BUT
I really think that if you tighten up your risk parameters that you will see a significant increase in your trading performance. I was having the same type of drawdowns on my account before I took a step back(should say forward) and reduced my trading size.
I now risk only 1% of my account per trade and have become extremely consistent month after month. I am actually very very close to 5% a week. I have yet to have a negative week since I did this.
Also think a little harder on how to increase your winners, another key for me.
GL!
BUT
I really think that if you tighten up your risk parameters that you will see a significant increase in your trading performance. I was having the same type of drawdowns on my account before I took a step back(should say forward) and reduced my trading size.
I now risk only 1% of my account per trade and have become extremely consistent month after month. I am actually very very close to 5% a week. I have yet to have a negative week since I did this.
Also think a little harder on how to increase your winners, another key for me.
GL!
I believe Western has it right.
Chinese proverb ,"Small fish are sweet."
Good luck and keep the faith in what you are doing.
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